To begin with, the company would produce feature phones and then would also engage in making smartphones, he added. The company would import handsets in SKD (Semi Knocked Down) form and manufacture the same in the assembly unit, which cost Rs 7-8 crore (without land valuation), Singh said.

He added that the company had a manufacturing facility at Baddi in the past, but due to labour troubles the unit was closed down. Singh said the company has decided to focus on the sub-Rs 4,000 segment in the tier II and tier III markets and has streamlined its distribution strategy, focusing at customer service.

"With aggressive new launches in the sub-Rs 4,000 (category) we aim to garner 15-20 per cent of the Rs 3,000 crore per month market in the next two years," Singh said. Realising deficiency in product quality in the past, the company has set up a team to concentrate on quality and inspection of the handsets shipped to India, he added.

Spice chief marketing officer Rajiv Sethi said the handset maker would spend Rs 100 crore over the next few months on branding exercise. Spice Mobiles, part of the diversified Spice Retail Ltd, is a Rs 1,200-crore business.